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Reicher Electric, Inc. v. Patel

Court of Appeals of Iowa

May 1, 2019

REICHER ELECTRIC, INC., Plaintiff-Appellant,
ATUL PATEL and SHRI GANAPATI & BAJRANGBALI, INC., an Iowa Corporation, d/b/a FAIRFIELD INN & SUITES, Defendants-Appellees.

          Appeal from the Iowa District Court for Black Hawk County, John J. Bauercamper, Judge.

         A subcontractor appeals a district court order denying a claim for unjust enrichment.

          Dan McClean of McClean & Heavens Law Offices, Dyersville, for appellant.

          Max E. Kirk of Ball, Kirk & Holm PC, Waterloo, for appellees.

          Considered by Tabor, P.J., and Mullins and Bower, JJ.

          Bower, Judge.

         Reicher Electric, Inc. (Reicher) appeals the district court's ruling in favor of Atul Patel and Shri Ganapati & Bajrangbali, Inc. (SGB). Reicher contends SGB was unjustly enriched by receiving the benefit of work when Reicher was not paid. We find Reicher did not establish a direct contract between Reicher and SGB and cannot support a claim of unjust enrichment.

         I. Background Facts & Proceedings

         On August 19, 2013, SGB entered into a construction contract with general contractor Main Street Developers (MSD), a Wisconsin company, to build a commercial hotel property in Waterloo.[1] The contract specified a firm price of $4, 450, 000 and required any changes or substitutions be approved by SGB in writing. Under the agreement, MSD was to "provide all labor, materials, equipment and services necessary to complete the Work." The contract had as an exhibit a list of items to be provided by MSD, including "Interior Lighting Fixtures (Permanent)."

         MSD hired Reicher for the electrical work on the hotel. The contract provided MSD would pay Reicher $300, 000 for the electrical work. After the project began, MSD approached Reicher and asked for assistance in obtaining the lighting fixtures; Reicher agreed for a price of ten percent of the cost of the lighting. Reicher approached Crescent Electric Supply Company (Crescent) to supply the necessary materials. Following an initial partial estimate from Crescent, MSD provided $70, 000 to Reicher for lighting fixture orders.

         After work had already begun, Reicher and Atul Patel, president of SGB, met with a hotel chain representative who suggested converting to LED lighting and provided a "spec book" of appropriate fixtures. Reicher informed Patel while the conversion would save electric costs, it would cost more upfront. Reicher claims Patel said to change to the LED lighting. Patel testified he never received a quote for the lighting and did not have a formal meeting with MSD regarding the LED lighting. No change orders were submitted to SGB or approved for electric work or light fixtures.

         MSD was not present at either LED lighting meeting, but was aware Reicher was ordering and installing LED lights. The owner of MSD testified the change in lighting was a separate agreement between Reicher and Patel that MSD was not part of, and he denied MSD was responsible for paying for the LED lighting. Numerous other changes to Reicher's work were requested, including electric car charging stations, floor boxes in the conference room, rewiring offices, adding notification lights to sump pumps, and additional outlets. Reicher also had to rewire for some appliances when fixtures provided by MSD did not match the electrical requirements on the plans Reicher was working from. Reicher included costs for all changes in its bill to MSD.

         From January 2014 through April 2015, Reicher ordered lighting fixtures from Crescent. Crescent ordered and Reicher installed the LED lights listed in the hotel chain's "spec book." As the $70, 000 was paid over time by MSD, Reicher made payments to Crescent; no other party made payments on the light fixtures ordered for the hotel. At the end of the project, Reicher still owed $106, 209.31 to Crescent. Reicher provided all the invoices to MSD, and MSD indicated Reicher probably would not get paid for everything. One week before completion, Reicher raised the issue of payment with Patel and SGB.

         Around the time of opening the hotel, MSD walked off the project without issuing a statement of substantial completion. After discovering MSD and SGB would not pay for the LED lighting and extra work performed, Reicher refused to do additional uncontracted work on the project. Reicher did not complete rebate forms for the lighting installed and did not complete warranty work in the hotel.[2]Some lighting materials were returned to Crescent, ...

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